Final answer:
A movement along the aggregate demand curve is due to changes in the aggregate price level. The total spending increase is influenced by consumer confidence, investment levels, government spending, and foreign trade balance rather than goods becoming cheaper relative to substitutes.
Step-by-step explanation:
A movement along the aggregate demand curve is caused by a change in the aggregate price level, not by increases in consumer spending or reductions in taxes or government spending. These latter scenarios would cause the curve to shift. On the microeconomic demand curve, a decrease in price typically leads to an increase in the quantity demanded. However, in the context of aggregate demand for an economy as a whole, a fall in the aggregate price level does not necessarily lead to an increase in aggregate demand because all goods and services in an economy are becoming cheaper relative to money, not just one product relative to others.
Aggregate demand is composed of consumption (C), investment (I), government spending (G), and net exports (exports minus imports, or X - M). Factors that can lead to increased total spending include enhanced consumer confidence leading to more consumption, increased investment due to lower interest rates, increased government spending, or improved trade balance. Therefore, while a fall in the aggregate price level increases the real value of money, it is the reaction of consumers, businesses, and government to the price level that affects total spending, not the comparison to substitute goods as in the case of individual product demand.